Starbucks Launches Mobile Payments


NEW YORK (MainStreet) — The next time you go to pay for your coffee fix at Starbucks, you may reach for your smartphone, not your wallet.

Starbucks (Stock Quote: SBUX) launched a new mobile payment option Wednesday in nearly 8,000 stores nationwide, which allows customers to pay by scanning a barcode on their smartphone.

To use this feature, customers must download the free Starbucks Card Mobile App, currently available on the iPhone and Blackberry phones, and transfer money to this digital Starbucks card the same way they would with a regular store card. When customers are ready to make a payment in the store, all they have to do is pull up the app on their phone, tap the tab that says “Touch to Pay,” and the app will display your card identification number and a unique barcode that can be scanned by the cashier.

According to the company, one of every five Starbucks customers already relies on the Starbucks Card, and a third of its customers use smartphones. Now, Starbucks is hoping these factors will help customers transition to a digital version of the card and embrace mobile payments.

Starbucks previously tested this mobile payment option in stores throughout Northern California and in New York City, and claims that customers not only adopted this method but that it actually has proved to be the fastest way to pay at the cash register.

At the very least, the Starbucks’ mobile app doesn’t just let you pay the bill, but also makes it easy to check your card’s balance on the go and locate coffee shops nearby. But the introduction of this feature may have a greater significance in the long term. Until recently, mobile payments have been a relatively niche method, more popular abroad than in the U.S. But Starbucks’ plan has the potential to introduce millions of Americans to the idea of paying with their cell phones. If this catches on, as Starbucks certainly hopes it will, it could ultimately be the downfall of the wallet as we know it, leading to an age where all our credit cards are consolidated on our phone.

While this might prove to be more efficient, there are still plenty of risks associated with mobile payments that consumers should be mindful of going forward.

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